India’s tax regime now simplified beyond recognition: Shri Ram Nath Kovind

India’s tax regime now simplified beyond recognition: Shri Ram Nath Kovind

tax regime now

NEW DELHI,8th April 2024: While conferring TIOL Fiscal Awards on India’s three extraordinary economists – Prof. Jagdish N Bhagwati of Columbia University, New York; Dr Vijay Kelkar and Mr N K Singh at a function here in the national capital, the former President of India, Shri Ram Nath Kovind while lauding India’s progress in streamlining taxation policy said, “The complex regimes themselves have been simplified beyond recognition. Now there are fewer tax lapses in process and taxation policy has become more predictable.”

Going further impact of tax process reforms, Shri Kovind said, “Investor confidence and ease of doing business has enhanced. The modalities of interaction between taxpayers and tax assessors have also undergone a tectonic shift in the recent past. All this has been made possible by leveraging technology and now the way forward will be increasing adoption of digital modes, of communication, and faceless tax assessment.”

The function was well-attended by the who’s who of the economics and policy world besides several Parliamentarians and a patroness of a media house.

Shri Kovind also praised the TIOL Knowledge Foundation for designing Fiscal Awards to encourage active policy work in the areas of tax, the use of digital technologies, and sound macroeconomic policies. He also appreciated TIOL for playing an active role in shaping and influencing appropriate policy decision-making and fostering dialogue among all stakeholders.

The Deputy Chairman of the Rajya Sabha, Shri Harivans Narayan Singh showered his praises on to three awardees and termed their contribution to the Indian and global economy and policy-making invaluable and unparalleled.

Delivering his Special Address, the Chairman of the 16th Finance Commission, Prof Arvind Panagariya, recalled the pivotal role played by each of the three honourees in shaping global trade policy and India’s fiscal policy journey which ensured vital micro-stability needed for high trajectory growth in the economy.

The noted trade economist Prof Jagdish Bhagwati, the recipient of TIOL Kautilya Global Award 2023, recalled his father’s legacy and fondly remembered his association with last year’s TIOL awardee former Prime Minister of India Dr. Manmohan Singh during a televised address from California.

While dedicating his Fiscal Award to the last four FMs of India with whom he had worked closely, Dr Vijay Kelkar called for the sharing of GST revenue with the Third Tier of the government. He noted that the urban economy requires much more efficient infrastructure and greater supplies of the local public goods. Unfortunately, urban local bodies are woefully short of the needed fiscal base to undertake investments for this vital infrastructure and for the supplies of needed high-quality public goods. Equitable sharing of the GST with the Third Tier will go a long way in strengthening the fiscal base of our urban governments and also to deepen democracy and governance at the grassroots level, he added.

Demanding a separate secretariat for the GST Council, Dr Kelkar emphasized that the time has come to simplify the GST rate structure. The GST rate structure designed 5 years back was largely to keep the effective rate of taxes to maintain revenue neutrality. This plethora of rates has made the Indian GST system unnecessarily complex, he added. He also urged the incoming government to undertake the GST reforms as early as possible.

“Out of the total countries who have implemented a GST or VAT, around 80 percent of those countries have chosen to have a single rate. A single GST rate for India has been an unmet goal, all along the discussions done before implementation. In fact, very early on in the GST debate, a single rate of 12 percent was recommended by the 13th Finance commission. The ages old tax policy of having a differential tax rate for “must have” and “nice to have” goods and services should be done away with,” said Dr. Kelkar.

Speaking on issues of fiscal policy for the 21st century in the Indian context, Mr. N.K. Singh, recipient of the TIOL Fiscal Heritage Award, made five profound points relating to fixation of fiscal norms, observed that long-term growth-fostering policies containing investment in infrastructure may deserve somewhat different treatment than one-size-fits-all, especially for fast-growing economies. He raised the point: What would be the ingredients in a post-pandemic world, which combines the virtues of growth with stability?

He concluded by saying: “We need a more robust fiscal and debt framework which is suitable in the Indian context, and at the same time meets global standards.” In this context, he emphasized the Prime Minister’s recent address to the RBI, in which he spoke of the virtues of growth and stability, and also pointed out that those issues of debt, both public and private, need informed decisions.

While praising Shri N. K. Singh’s role as the Chairman of the 15th Finance Commission, Dr. P. Thiaga Rajan, Minister for IT & Digital Services, Government of Tamil Nadu said that he differed with him on many issues as both come from different backgrounds and eras of fiscal challenges.

Former RBI Governor Dr. C. Rangarajan, Prof. Lord Nicolas Stern of the London School of Economics, and former US Treasury Secretary Mr. Larry H Summers also delivered their address virtually and heaps of praise on the awardees.

Justice Shiva Kirti Singh, former Judge of Supreme Court of India and the Chairman of Hon’ble Jury highlighted the challenges of selection and thanked his predecessor Late Justice Lahoti for laying out robust processes and structures for selection.

Expressing his happiness over honoring such towering personalities TIOL Knowledge Foundation Chairman Mr. Shailendra Kumar highlighted the enormous contributions of awardees and the deep impact they have left on Indian and global economics, law, and policy-making.

The event was attended by who’s who of economics, law, policy-making, and media including Dr. Montek Singh Ahluwalia, former Dy. Chairman of the erstwhile Planning Commission, Senior lawyer Mr. Harish Salve, Politician Shri K. C. Tyagi, Vice Chairman of Niti Ayog Shri Suman Bery, and Ms. Sobhana Bhartia, Chairman of HT Media.